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Mutual Agreement Procedure Double Taxation

In Uncategorized on 11/04/2021 at 07:39

The mutual agreement procedures mentioned here are administrative procedures based on the application between two countries. They protect the taxpayer`s right to be taxed under a double taxation agreement (DBA). A DBA is an agreement between two countries that regulates, among other things, the transfer of the right to tax income generated by borders (for example. B, residence in one country and income from the other country). The legal basis for a mutual agreement procedure is the DBA concerned. Germany has concluded DBA with more than 90 countries in the world. Most of these DBAs follow the OECD`s draft international agreement. The provisions on mutual agreement procedures are set out in Article 25 of the OECD Model Convention. Recent ABA often contains provisions that prescribe arbitration through an unsuccessful mutual agreement procedure.

The Arbitration Convention of the European Union (EU) establishes a procedure for settling transfer pricing disputes for EU member states. This procedure may apply in cases of double taxation between companies in different EU Member States. You can apply for a POP if you think you are taxed – or taxed – not in accordance with a tax treaty. Once you have filed your application, you will no longer participate in the POPs negotiations. The CAs negotiate to resolve your needs. They may also attempt to reduce double taxation in cases that are not covered by the tax treaty. OECD statistics clearly show that there are more cases of POPs. It can be inferred later that there are more audits and more adjustments. The result has been increased pressure on THE POPs themselves to improve the way it should work and to increase pressure on the competent authorities responsible for eliminating double taxation.

Competent Authority (institution) – Tax inspectorate of the Ministry of Finance of the Republic of Lithuania. The permanent working group on the handling of double taxation dispute resolution procedures is responsible for handling all map cases. The point of contact for issues relating to double taxation dispute resolution procedures is: Ms Vaide Riskute, Head of the Permanent Group on Dispute Settlement Procedures: Tel. E-mail: Under the agreement, once in arbitration proceedings, an opinion from the arbitration panel must be issued within six months, and the relevant authorities will have an additional six months to agree to accept this result or to agree on an alternative to eliminate double taxation. Subjects who believe that their imposition is contrary to a DBA or the European Arbitration Convention may request a procedure of mutual agreement. In Germany, the Bundeszentralamt for Steuern (BZSt) is responsible for the implementation of these procedures. Applications for mutual agreement proceedings can therefore be filed directly with the BZSt. As a general rule, non-German resident applicants must submit these applications to the competent authority of their country of residence.

The BZSt does not collect royalties for mutual agreement procedures (with the exception of prior price agreements; see fact sheet on advance price agreements). The mutual agreement procedure is designed to determine the tax debt between two countries. The partners in the process are therefore the contracting countries concerned. The applicant herself is not part of the proceedings. However, the applicant is regularly informed of the status of the procedure and the status of the procedure. In the vast majority of cases, countries reach an agreement. Some might argue that arbitration has the advantage of encouraging Member States to settle disputes before the two-year deadline expires, which would be a success rather than a failure of the convention. However, statistics also show that 202 cases had exceeded the two-year deadline, while it had been cancelled with the taxpayer`s consent.